iimb sedulity strategy ppt
TRANSCRIPT
Market entry strategy
Rishav Kanodia
Puneet ManujaTeam Sedulity
IIM Bangalore
Naveen P Kalro
Rohit Jaiswal
We are Green : Breathe easy, Breathe fresh
SPIRO: Overview
Mission
To impact the lives of millions through sustainable eco-
friendly automotive technology
Vision
To provide world class automobiles that ensure a
pleasurable driving experience while also being light
on the environment in a conscious effort to provide a
clean and green tomorrow to future generations to
come.
Target Segment
The cars manufactured by Spiro motors are
primarily designed to cater to the needs of
customers belonging to the following segments:
Segment 25-40 Years 41-55 Years
City (2)
Medium (1) (1)
Large (1)
*(n) – denotes the number of cars launched in a given segment
Appendix 1 : Details of Car launch timeline and segment
Focus Areas
Hybrid Cars
Lower dependence on volatile prices of fossil fuels
Cleaner Environment
Affordability at competitive prices
City and Medium car segment
High end technology at reasonable prices
Excellent fuel efficiency
Lighter Aluminium body
Energy recovery and storage technology
Financial Projections
Ratio/Year 2011 2012 2013 2014 2015
ROE (3.77) (31.83) 32.97 140.12 95.92
ROA (2.49) (21.05) 21.06 92.25 77.28
Debt/Equity Ratio 52.45 49.90 66.45 41.54 16.19
Profit Margin (12.68) (37.29) 16.92 44.53 42.48
Asset Turnover 19.68 56.47 124.49 207.19 181.95
Leverage 151.15 151.20 156.57 151.88 124.12
Brackets denote negative values
THE SPIROGENS
Rishav Kanodia
(CTO)
Resourceful and Analytical
Puneet Manuja
(CEO)
Dynamic and Inspiring
Naveen P Kalro
(CFO)
Analytical and Quick Witted
Rohit Jaiswal
(Creative lead)
Innovative and Artistic
Executive team, Spiro Motors
Appendix 1: Market Share Estimation
Population of EU : 501,654,162 as of 2010
Based on the 2008 data: 23.5% of the population owns cars i.e. almost 1 in 5 have a car.
Population Age wise: 25-40: 104503253
41-55: 110198867
No of people in these age groups who can buy a car:
25-40 : 23.5% of 104503253= 24558264
41-55 : 23.5% of 110198867= 25896733
Our Target Segment: 11% of the total market in the age group 25-40 buys city cars = 2701409
Appendix 1: Continued
Our Target Segment: 11.5% of the total market in the age group 41-55 buys city cars = 2978124
84% of the people will prefer fuel efficient cars in the future as per the KPMG research.
In 2008, 0.7 % of the car sales was hybrid cars in 2008. Growth rate of hybrid cars= 65% year over year. So, in 2011, the market share of hybrid cars will be = 3.14%
Our Market Share = 10 % of the hybrid car owners in the target age groups
Market Growth Estimations/Assumptions has been provided in Appendix3
Appendix 2: Car launch timeline
CAR Segment Target Age
group
Year of launch Price (in
pounds)
Spiro Micro City 25 – 40 2010 9200
Spiro Mini City/Medium 25 – 40 2010 12400
Spiro Classic Medium 41 – 55 2012 19000
Spiro Dynamic Medium 25 – 40 2013 17500
Spiro Suave Large 41 – 55 2014 26000
Appendix 3:Year on Year Growth
Estimate
Micro Mini Classic Dynamic Suave
YOY growth 2011 over 2010 65% 65% - - -
YOY growth 2012 over 2011 50% 50% - - -
YOY growth 2013 over 2012 35% 35% 65% - -
YOY growth 2014 over 2013 15% 15% 50% 65% -
YOY growth 2015 over 2014 10% 10% 35% 50% 65%
Appendix 4: Assumptions About Costs
Cost(in pounds)
Raw material per car (City) - Micro 1000
Raw material per car (City) - Mini 1700
Raw material per car (Medium) - Classic 1900
Raw material per car (Medium) - Dynamic 1800
Raw material per car (Large) - Suave 3000
RnD Cost per CAR 300,000,000
Factory Cost 650,000,000
Factory Useful Life 6
Markup/Profit 10%
Appendix 5: Different Costs as
percentage of Total Variable Cost
Raw Materials
51%
Warranty5%
Laour10%
Selling & Distribution
25%
Administration9%
Variable Costs
Appendix 6: Annual Sales Forecast
Year/Sales Micro Mini Classic Dynamic Suave
20103,925 3,925 - - -
20116,476 6,476 - - -
20129,714 9,714 8,350 - -
201313,114 13,114 13,778 8,287 -
2014 15,082 15,082 20,666 13,674 4,765
2015 16,590 16,590 27,899 20,510 7,862
Assumption: The factory set up initially has enough infrastructure to sustain production of all cars.